IRDA Claim Settlement Ratio 2013-14-What does it mean?
IRDA has released its annual report for 2013-2014 couple of days, which contains Claim Settlement Ratio 2013-14. This is an important factor, an individual has to consider while selecting a life insurance company. What are the highlights of the IRDA annual report of 2013-14 pertaining to claim settlement ratio? Which are the best insurance companies from the published list of IRDA claim settlement ratio of 2013-2014?
What is claim settlement ratio?
If you are already familiar about this, you can skip this section. Claim Settlement ratio is the ratio arrived by comparing the total claims paid over the total claims received by the insurance company. If an insurance company has received 100 claims, but paid only 90 claims and rejected 10 claims, claim settlement ratio is 90%. High claim settlement ratio company is good for insured. Hence, individuals would prefer high claim settlement ratio insurance companies so that their claim is not rejected in the future.
IRDA Claim Settlement Ratio 2013-14 – Highlights
I am producing some of the highlights of the IRDA annual report about claim settlement ratios for 2013-14.
Highlights of Claim Settlement ratio of 2013-14 for individual death claims
- Claim Settlement ratio of LIC is better than Private Life Insurance Companies.
- LIC Claim Settlement Ratio has increased from 97.73% (2012-13) to 98.14% (2013-14). Repudiation (Rejections) has remained almost same and stands at 1.1% for 2013-14 compared to previous year. The difference between claim paid and repudiation (rejections) are proposals pending.
- Private Insurers Claim Settlement Ratio has gone down slightly from 88.65% (2012-13) to 88.31% (2013-14). Repudiation has increased from 7.85% (2012-13) to 8.03% for 2013-14. Private Insurers repudiated 10,036 claims compared to LIC of 8,387.
- Overall industry claim settlement ratio increased from 96.41% (2012-13) to 96.75% (2013-14). Overall industry repudiation remained same level at 2.08% in 2013-14 compared to previous year.
Some of the high claim settlement ratios companies for 2013-14 are listed below
- LIC – 98.14%
- ICICI Life – 94.10%
- HDFC Life – 94.01%
- Max Life – 93.86%
- Star Union – 92.86%
Complete list is indicated below
Highlights of Claim Settlement ratio of 2013-14 for group death claims
- LIC claim settlement ratio is 99.65% and private life insurance companies are at 90.45% for 2013-14.
- While the LIC claims settlement ratio is 99.65%, other top claim settlement ratios are Birla Sun Life ratios are 99.95%, Bajaj Allianz 98.27% etc.,
- Detailed list of insurance companies along with claim settlement ratios for group death claims is enclosed in below table.
Other Highlights of IRDA 2013-14 report
Out of 24 life insurers operated for 2013-2014, 18 reported profits for the year. They are Aviva Life, Bajaj Allianz, Birla SunLife, Canara HSBC, DHFL Pramerica, EXIDE Life, HDFC Standard, ICICI Prudential, IDBI Federal, Kotak Mahindra, Max Life, PNB MetLife, Reliance Life, Sahara India, SBI Life, Shriram Life, Tata AIA and LIC of India. (Indicated in alphabetical order)
Conclusion: Claim Settlement Ratios are one of the key components in choosing a life insurance plan. Consider high claim settlement ratio insurance company. However, one cannot do anything if claim settlement ratios are coming down from previous year (where you would have brought insurance plans earlier). However, I observed, LIC, ICICI Life, HDFC Life are standard life insurance companies where claim settlement ratios are always high and ranks in top-5. I considered ICICI Term Insurance plan 6 months back taking this as one of the key points while other features do play role in selecting a good term insurance plan.
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IRDA Claim Settlement Ratio 2013-14